Alibaba and Baidu Invest in Horizon Robotics’ Upcoming $700 Million IPO
Chinese tech giants Alibaba (BABA) and Baidu (BIDU) are participating in a significant $700 million initial public offering (IPO) by Horizon Robotics, a company focused on smart driving technology. Their involvement underscores the rising demand for autonomous driving solutions.
Horizon intends to issue 1.36 billion shares, priced between $4.75 and $5.09 each. This effort could lead to a valuation as high as $6 billion, positioning it as one of this year’s most notable listings on the Hong Kong exchange.
Nearly 70% of the IPO proceeds are earmarked for research and development, with the remaining funds allocated for sales and marketing efforts. Horizon’s IPO is being guided by a team of banks, including Goldman Sachs (GS), Morgan Stanley (MS), and China Securities International.
Investor Enthusiasm Grows Ahead of Horizon IPO
As Horizon prepares to debut on the Hong Kong exchange on October 24, it has attracted significant interest from a range of investors. Notably, Alibaba, Baidu, and Beijing Financial Holdings, a state-owned entity, have committed to purchasing more than 30% of the available shares. This strategic move aims to enhance investor confidence and draw wider interest in the offering.
Other notable investors include tech giant Intel (INTC), Volkswagen (VWAGY), BYD (BYDDY), and Contemporary Amperex Technology, further highlighting the collaborative nature of this IPO.
Analyzing Alibaba: Buy, Sell, or Hold?
Recent analyses from Wall Street indicate a Strong Buy consensus for Alibaba (BABA), with 16 Buys and three Holds assigned over the last three months. Currently priced at $123.74, analysts suggest an average price target that indicates a 21.5% potential upside. This year, Alibaba shares have notably increased by around 34%.
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Understanding Baidu’s Price Target
Baidu (BIDU) also enjoys a Strong Buy consensus, with 11 Buys and three Holds in the past three months. Currently at $128.75, the average price target for Baidu suggests a significant upside potential of 37%. However, it is important to note that Baidu shares have dropped about 21% year-to-date.
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